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Client's wife (HCE) contributed $19,500 both to her husband's 401(k) plan, and the 401(k) plan for another company she works for in 2021. This was discovered in July 2022. As I understand it, while EPCRS permits the participant to distribute the excess even after April 15, it may not be the best outcome for the participant. Without going through EPCRS, any excesses remain in the 2 plans, a 1099-R is issued on the $19,500 principal for the year of excess (2021), and the funds, when distributed, become taxable again. Without EPCRS The spouse receives a 1099-R for 2021 reporting a taxable event in the amount of $19,500. 20 years later, at age 65, she takes a distribution, and it is once again taxable to her (plus earnings), but without the 10% early withdrawal penalty . . . correct? Further question: Is this undistributed excess eligible for rollover, or must it be tracked separately and processed as a taxable distribution (with applicable earnings) when a distributable event occurs? With EPCRS The spouse has not attained age 59 1/2. Therefore she would be subject to the early withdrawal penalty for 2022 when she takes the distribution, and the client pays the TPA to do the painful work of preparing 1099-Rs for both 2021 and 2022. But, the money is out of the plan, and the problem disappears. Because the April 15 grace period has passed, does she pay an early withdrawal penalty for both 2021 and 2022? Ugh, I know I'm overthinking this, but the more I research the worse it gets. Thank you!